Further to my blog post yesterday, quoting Lord Prem Sikka, who I have worked with for twenty years on tax justice issues, I note this exchange in which he was involved on the matter of tackling fraud within Covid loan and furlough applications yesterday in the Lords:
Prem's questions make complete sense. I have not a clue what the answer means, and I am sure Prem has not either. It is gibberish, beyond the admission that the Viscount was unable to answer.
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This is the first time I believe any real light has been thrown on this area, which reveals a serious abuse of Power. I say that because the neoliberal commitment to free enterprise and free markets, combined with tabloid populism cannot afford public attention to be turned to this matter: to inspect publicly how people actually use and abuse their ‘economic freedom’ in the real world, and to claw back the huge losses to the public purse from private gross abuse.
Thus we have the tabloid fury unleashed by neoliberal newspapers whenever there is a move to improve benefits for the poor in a crisis, in order to direct public outrage against the claimed vast abuse of public benefits by benefit fraudsters; but also to deflect attention from the widespread, rampant white-collar fraud or tax evasion, and typically to focus public attention exclusively on the burden of ‘red-tape’ on entrepreneurs that is supposed to be grinding down enterprise.
Anyone who understands how Governments or business, or enterprise actually work must know the quantum of fraud in the ‘enterprise’ economy far, far outstrips the level of fraud in public benefits given to the poor. It is far, far cheaper for government to provide universal benefits than it is to spend, as it does, very large sums on pursuing benefit fraud for the meagre returns that effort produces, save in lurid and misleading Daily Mail headlines. The returns are purely political propaganda – examples of benefit fraud usefully stoke public outrage against the poor; which is exactly where neoliberalism wishes to direct public attention.
Currently Government spends very little, and provides very little resource to pursue corporate, business and economic fraud, when this would cetrainly produce huge returns for the public purse, if spent at scale, and effectively. But government know this; so we may draw the reasonable conclusion that not pursuing fraud in the private sector is deliberate policy. The Government clearly declines to invest in pursuing economic fraud, as a matter of policy. You work out why that may be.
“deflect attention from the widespread, rampant white-collar fraud”.
I used to work for Sony in South Wales at their Television tube factory where I was the Engineer responsible for all factory services during the 1980s. I was directly responsible for all purchasing with a sizeable budget and could pick & chose suppliers. Being naif, I applied two criteria: fair prices and delivery on time. Most suppliers were pathetically grateful to deal with us. When I protested at the booze that was supplied, in gratitude at Xmas (me: “if you were crap you would not get business in the new year, booze or no booze, given you are good booze quite uneccessary etc”,,,the booze btw was distributed equally amongst me & my technicians)……..I got the stories of suppliers doing business with other companies on the South Wales industrial strip. These stories of white collar corruption I found (& still do) terrifying. Foriegn holidays, yachts, boats etc etc. Rampant corruption.
Shortly after I left, Sony reverted to a more conventional pruchasing dept arrangement. This arrangement disconnects those interested in results (me) from the suppliers and interposes a layer open to corruption (the “purchasing dept”). The structure esures the corrupt result.
As Sikka noted: a failure to implement simple checks led to a highly corrupt situation – one could also assert that this could be coupled to no person having a direct interest in input(money) vs output/result. That said, Toryscum have always been corrupt to their core & stupid to boot, so can we really be surprised at the end result?
Indeed, and let’s take this opportunity to remind ourselves just how badly benefit claimants have been treated by recent government https://www.disabilitynewsservice.com/dwp-staff-admit-inflicting-psychological-harm-on-claimants-during-coalition-years/
Second, Lord Agnew’s resignation and his crisp, forensic ‘take-down’ of the Treasury should remind us that one of the major problems here is the man ultimately responsible for the abject failure of fraud policy; the over-hyped, under-powered Chancellor, Rishi Sunak.
Sounds to me that the department concerned has not even got around to dealing with this yet.
Before Xmas, my partner was caught driving in a bus lane but we only found out when we got the Charge Certificate on Saturday now asking frp £90 instead of £30 discounted ‘pay up’ now fine.
We had not received the first fine letter. Anyhow, they accepted the ‘defence’ and knocked the fine down but you wonder about why they seemed to be so ill prepared to counter fraud when giving away such large amounts of money when the machinery of Government can be so quick and effective at charging people for accidentally driving in bus lanes.
It all just undermines the public perception of Government and the public sector as well.
“Sounds to me that the department concerned has not even got around to dealing with this yet.”
No, Agnew’s attack was based on the “arrogance, indolence and ignorance” of government. The arrogance is understood; the indolence perhaps understandable, but only because the indolence is convenient to Government. Ignorance is a less convincing explanation. Ignorance of what? Even this hopeless Government ‘s ignorance cannot adequately expressed by the “schoolboys” errors committed. Absolutely basic checks that may find and remove companies from potential consideration, for example; there is a director of a registered company, under the name ‘Adolf tooth Fairy Hitler’ [https://find-and-update.company-information.service.gov.uk/officers/TuA9zMlZy5LtlglBOTPtYoOXhYM/appointments].
The inadequacy of the government effort to pursue fraud is much better explained by the resistance of neoliberal ideologues to pursue free enterprise closely enough to reveal the catastrophic flaws in our whole system of business regulation (which has many of the same characterisitcs of a Boris Johnson ‘work event’; it looks like, sounds like, and ends like a party).
Conservative ideologues would much rather take the huge financial hit, and instead waste vast sums of money pursuing the ‘undeserving poor’ over benefits, so they can feed the Daily Mail or Sun with lurid, anecdotal tails of benefit cheats, with a continuous menu of new examples. Simultaneoulsy claiming there is too much ‘red tape’ for business, to ensure there is no scrutiny; because scrutiny risks revealing just how much the public purse is being ripped-off by professional economic fraudsters, disguised as ‘businessmen’; or tooth fairies.
I agree with all that
Flawed ideology explains this
John – woaaa there tiger!
To be clear I’m not defending the department concerned by saying:
“Sounds to me that the department concerned has not even got around to dealing with this yet.”
All it means is what it is – they have not done their job whatever it is. I was contrasting the rather ‘relaxed’ attitude to giving away £13 million compared to the gusto a small thing like being in the wrong bus lane is treated for us ordinary mortals.
That’s all. You’d think that they would have thought about dealing with fraud as they launched the initiative wouldn’t you? Evidently not.
As for the rest of your post a strongly concur.
Now it is becoming interesting. The PM did not support Sunak when challenged at PMQs by a question of the £4bn+ fraud. Sunak is now hitting back (implicitly at the PM), claiming he has not “written it off”. Well Mr Sunak, he could have foolled us; it took a brutal public assessment in Parlaiment of your Treasury (and effectively your leadership), by your Fraud Minister, followed by his immediate resignation because of the failure, just to produce a limp Tweet from you that you haven’t written it off. I think the British people should decisively write Sunak off – fast; as both a Chancellor and aspirant PM.
The shortcuts that have led so obviously to wholesale fraud would have been unlawful if they had been done by local authorities. Specifically they would have been contrary to Section 17 of the Crime & Disorder Act, 1998. This Act should have been written to include central government departments, but they were omitted. This legislative mistake has cost the public purse billions of pounds through fraud, for two decades, before Covid came along. btw I was a Detective Superintendent in the Met Police Fraud Squad, did I mention that before?
Thanks
Thanks for that invaluable information Mr Hicks; it provides a striking perspective on the contextual framing of Agnew’s well-aimed, exasperated “arrogance, indolence and ignorance”‘ remark.
What an excellent resource of informed knowledge for readers your Blog unfailingly offers, Richard.
What a contrast
New Universal Credit crackdown will see DWP specialists check claims for fraud
The UK Government has announced new plans to give a £510 million cash injection to the Department for Work and Pensions (DWP) to help it crack down on Universal Credit fraudsters lying about their benefit claims.
Funds were released after figures show the DWP prevented at least £1.9 billion of fraud during the first year of the pandemic. Under the plans, the UK Government will use the money to improve the Department’s capability and capacity to detect and prevent benefit fraud and catch fraudsters across the country.
https://www.dailyrecord.co.uk/lifestyle/money/new-universal-credit-crackdown-26052315
And they refuse a fee increase at Companies House could pay for it to be an effective regulator
Yes, but the purpose of the preferred policy is to focus attention firmly on the ‘undeserving poor’; and more important, as far away as possible from the far, far bigger problem of corporate fraud. Fixing that would never do. The priorities in expenditure tell you all you need to know about the real nature and aims of Government and the Conservative Party. As political commentators should have advised the public waht to worry about, but didn’t: Follow the Government Investment Money. There you will find what really matters – most of all to Government and its supporters.